Thursday was a pretty cool day as a microcosm of startup VC life. We signed a termsheet for a new seed investment in the morning and then spent the afternoon/evening hosting our 3rd Homebrew Annual Meeting for our fund’s investors. I’ve written before about our LP meetings – if you want to check those out before hearing about 2016’s version, here you go:

Homebrew Annual Meeting 2014

Homebrew Annual Meeting 2015

Ok, now back to present day. Format for this year was pretty similar. Advisory Board lunch w our largest investors followed by a State of Homebrew, State of the Market, State of our Portfolio presentation. We ended the day with presentations from four of the founders we’ve backed (they did a great, great job). And then a dinner with our institutional investors, founders and advisors.

For this post I want to share a little bit about what we said we know, and don’t know, three years into the lifecycle of a new fund.

I. We Don’t Trust The Numbers (Yet) But We Trust Our Founders

On paper Homebrew’s first fund is shaping up very nicely, with, to date, significant appreciation in the portfolio and a healthy number of companies growing real revenues. But we know valuations are just a moment in time based upon any number of market factors. And companies at this stage are still fragile. So what do we know? We know a lot more about the founders we backed than we did when the initial investment decision was made. And we have huge confidence in them.

Satya and I wake up each morning 100% ready to put sweat and reputation behind every CEO. If we can help them build a company that matches the vision in their head, we know the economics will follow.

II. We Love Cooperating But Are Hungry Competitors

In Year One, we just wanted to start sharing our story with the market. Now in 2016, we’re fortunate enough to find ourselves often partnering with the best angel investors and VCs. But we also know there are times when we need to be able to beat them to win an opportunity. Homebrew does this not by telling entrepreneurs why they shouldn’t take someone else’s money, but why we want to be their choice. And by introducing them to any of companies we’ve backed – founders talking to founders are the most compelling testimonials. That deal we signed the morning of our Annual Meeting? Two CEOs from Homebrew’s portfolio jumped on the phone with the founder the night prior to share their thoughts about working with us.

Satya wrote a separate post with more dealflow details.

III. These Are Our Board Meetings

Satya and I believe investors have a single customer: entrepreneurs. But we have partners that we wouldn’t be in business without: our LPs. We were intentional about trying to raise from the highest quality LPs who have exposure to other amazing funds. As a result we get better from working with them. We are open with them – sharing how we think about our investment decisions, perceived opportunities to get better at what we do, what we think will be challenging for us. We treat them like our Board of Directors and optimize for learning and discussion rather than just putting on a show. Although we did have a magician this year….

After the last of our founders, investors and advisors left dinner, Satya and I walked back to our SOMA office. The first few minutes were silent and then we turned to one another with expressions of “how lucky are we???” To still be in the early years of something we intend to do for the rest of our careers, having started a firm built upon shared values. To be entrusted with other people’s money. To be backing founders solving large, urgent and valuable problems. How. F’in. Lucky. Are. We? Very lucky.

And so starts Year Four…..!